CPA firms (and very likely other professional services firms) are devoting 10% of their marketing budget to charitable giving. I’m frankly baffled by this as a strategic move as the expected ROI has to be near zero. Let’s discuss why this happens, how to rein it in, and how to say Yes or No to a request.
Undoubtedly you have non-profit clients. They will, as they should, ask their service providers to participate in their fundraising efforts at some point during the year. When presented with this request, you dutifully review the sponsorship levels for the gala/golf tournament/dinner, and start the internal discussion about participating in the event.
Let’s unpack that from a marketing perspective. In the Pro column, you are displaying your firm’s culture as one that has a commitment to the community while supporting a worthy cause and/or client. This will be attractive to Millennial and Gen Z employees. To me this isn’t how I would spend 10% of your marketing budget. In the Con column, your spending is unlikely to result in any positive ROI in the form of new clients. That’s a big deal.
So, what should you do? There are a few paths forward.
- When bidding on a NFP client, describe your firm’s decision process or expectation for charitable giving so that everyone is on the same page from the start.
- Create a charitable giving committee internally that reviews all requests. It can be really tough to be the one who says No. Having a committee lets you “pass the buck” in a polite way when you get asked. Tell the person that your committee reviews all requests and that by design partners have no sway.
- One step further than the committee is to create a charitable foundation for the firm. Employees can contribute and vote on where the funds go.
- Develop a Corporate Social Responsibility platform that will align your giving (and volunteering, etc) with your firm’s purpose.
- Volunteer in addition to or in lieu of giving a monetary gift.
The most important thing to do is to put a lid on spending. It can be really really hard to say No, especially when it’s a client request. But saying Yes to a gala at $5,000 or $10,000 means saying No to something else. And $10,000 goes a LONG way in marketing. Consider making charitable giving 5% of your marketing budget instead of 10%. You may not get ROI from your gifts, but your reallocated funds should, and that’s better. I know that non-profits need our help. If you don’t want to reduce your overall giving, then I think that’s great. But please reduce/remove that line item from your marketing budget and put it into another bucket. It’s not fair to ask your marketing person to be responsible for ROI if you’re not giving him/her the choice on how to allocate spending.
Large firms are already being highly strategic about when to say Yes to charitable giving requests. They view charitable gifts as brand awareness and relationship marketing and they expect a lot for their dollars in the form of visual recognition, press releases, special treatment like intros to a guest speaker or early access, etc.
Start saying Yes to fewer organizations, but make a meaningful and lasting relationship with that charity. Both sides will see it as a two-way relationship instead of a single transaction so that unexpected perks like a board seat, an invite to sit-in on a pitch with a government official, or something else may come along.
I hope you’ll at least reconsider your charitable giving as a result of reading this. If you want help thinking through what path forward to take, please contact me.
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